Probability Indicates BoC is Likely to Reduce Interest Rates Further, Potentially with a Significant Decrease

December 9, 2024 TruthUSA

Financial markets and forecasters are expecting another significant interest rate cut from the Bank of Canada this week.

Statistics Canada’s latest job report has influenced expectations towards a larger cut.

In the Friday report, the unemployment rate increased to 6.8 percent in November from 6.5 percent in the previous month, as more individuals sought employment.

A half-percentage point reduction in interest rates would decrease the central bank’s key rate to 3.25 percent.

The Bank of Canada reduced its key rate by 0.5 percentage points in October in response to inflation returning to its target level, but indicated that the next rate decision would depend on data.

Canada’s inflation rate was at two percent in October.